If they were not in an election year, lawmakers might be fixing America’s fuel ethanol wreck instead of skewering consumers and hiding the damage.

But no politician wants to admit mistakes in an election year.

The latest round of ethanol mistakes began in 2005, when Congress imposed volumetric requirements for grain ethanol in motor fuel. Congress compounded them in 2007 by sharply raising the mandate and specifying that a growing share of the requirement be met by cellulosic ethanol starting in 2010.

The ethanol program now faces two fatal problems.

Because gasoline demand has flattened, the market soon won’t be able to use ethanol in the growing amounts required.

And because no one yet is producing cellulosic ethanol commercially, an escalating requirement is in place for material that barely exists.

Eventually, Congress will have to mitigate these perversities by scaling back the ethanol requirement overall and trimming if not eliminating its cellulosic component.

But doing so would amount to admission of costly error. It also would remind voters that congressional adventures in fuel choice always fail.

This won’t happen in 2012.

With help from the Environmental Protection Agency, Congress is tiptoeing around its fiasco.
To delay arrival of the fuel market’s saturation point for the additive, EPA has raised the ethanol blending limit for gasoline in some uses to 15% from 10%. This worries fuel suppliers and engine makers. They think fuel containing the higher level of ethanol might find way into equipment that shouldn’t use it and cause damage.

So lawmakers from both political parties have introduced bills in both houses of Congress shielding the worried companies from liability. Essentially, they’re putting all the risk on consumers.

They’re not saying so, of course. Their press statements crow about giving consumers more choices at the pump and the chance to run vehicles on “domestic, renewable fuel.”

That smoke probably will let them sneak past the elections. But it fails to address a fundamentally errant program that only worsens with time.

source: ogj

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